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Microsoft Enterprise Agreement (EA) vs. Cloud Solution Provider (CSP) Licensing Agreement: What's Best for You?

Microsoft Enterprise Agreement (EA) vs. Cloud Solution Provider (CSP) Licensing Agreement: What's Best for You?


Choice is critical in business, but sometimes it’s difficult to determine the best decision for your specific organization. Such is the case when it comes to contracting services for Azure and your other Microsoft cloud applications. For many years, the best choice for larger organizations was signing up for an Enterprise Agreement (EA) directly with Microsoft. However, now there is a new option called Cloud Service Provider (CSP), a contract you can purchase from a certified Microsoft partner.

Both offer similar services and similar pricing. There are advantages and disadvantages to both depending on your size and type of business. So, how do you decide what’s the right choice for your organization? Below is a look at the two options in several key areas.

ea vs csp

An EA is a three-year agreement and requires a minimum of 500 licenses to be purchased at the same time. The most frequently purchased licensing options are Office 365 plans - any combination of the E1, E3, and E5 licenses would count. Customers pay upfront for the entire year at one time, which is unexpected for a subscription service and can make cash flow tough. Any user licenses added during the year would be paid on the next anniversary, which can also make cross charging quantities difficult. Quantities on the EA can go up during the year but can only come down by providing a notice 30 days prior to the anniversary. If the company divested a division in the first month after their anniversary, they may have to pay for licenses for 11 months that are unused. CSP licensing is based on a month-to-month commitment, which can be attractive for businesses in volatile markets with inevitable ebbs and flows or businesses that have seasonality. It is also beneficial for organizations who find it difficult to predict longer term usage requirements or those who may want to start with a basic plan as they move to Office 365 (like email only) and then increase the licensing level as users adopt the functionality.

In general, larger organizations with 500+ users are frequently be better off with an EA. For smaller organizations, a CSP might be the best alternative. However, each business will have unique needs to be considered. Contact us to discuss your options and help determine the right option for your business.

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